Adler paid Jacobson an undisclosed sum in late 2012 or early 2013 to settle the lawsuit. He has declined to say how much he paid Jacobson. The terms of the out-of-court settlement are confidential.

Wright pressured Adler to make the payment because he was uncomfortable with a caucus member having an unresolved dispute with Jacobson, sources say.

Jacobson filed the suit in October 2011, claiming he loaned Adler more than $100,000 for Adler to establish an American offshoot of his business, the Economic Club of Canada.

Conservative MP Mark Adler is followed by journalists in this file photo. THE CANADIAN PRESS/Sean Kilpatrick

In a statement of defence filed in January 2012, Adler acknowledged receiving $114,962 from Jacobson, but said the money was not a loan but a gift given to Adler as “a friendly gesture,” and asked the court to dismiss the suit. Adler accused Jacobson of using threats in his effort to be repaid, demanding that Adler provide financial statements.

At the time that Jacobson transferred money to Adler, he was moving in Canada’s highest business, political and philanthropic circles. He was friendly with Conservative cabinet ministers Jason Kenney and John Baird, and was photographed with Prime Minister Stephen Harper and Israeli Prime Minister Benjamin Netanyahu.

For years, though, he had kept a secret from his well-connected friends: in 2008 he pleaded guilty in a San Diego courtroom to money laundering as part of Affpower, an offshore pharmacy that provided drugs to people without proper prescriptions. He agreed to forfeit $4.5 million as part of his plea agreement.

A judge sealed the agreement while Jacobson secretly worked to help American authorities with their investigation, and he continued to travel the world pursuing his business interests and forging relationships with senior Canadian Conservatives.

In July 2012, though, when it was time for him to return to San Diego for sentencing – he was expected to get more than two years in federal custody – Jacobson didn’t show up as he had agreed to do, becoming a fugitive from U.S. justice.

After Postmedia News reported on his legal difficulties, Jacobson stayed away from his political friends.

In October 2012 – just hours before Toronto police arrested him for extradition to the United States – Jacobson told CBC News that he was staying away from his friends in Ottawa.

“I myself made the decision that it’s best to keep a distance, in order to protect my friends,” he said. “I would for the most part consider them still my friends. But while I’m — for the lack of a better term — radioactive, better let them to continue to run government.”

A week after Jacobson’s arrest, on Nov. 2, Wright, then the chief of staff to the prime minister, called Adler at his Toronto constituency office and pressured him to settle the legal dispute. Neither Adler nor Howard Wolch, the Toronto lawyer who handled the settlement for Jacobson, would discuss details of the settlement.

Wright, who recently left Ottawa to work in London, England, declined to comment, as did the PMO.

A month after quietly and successfully pressuring Adler to settle his dispute with Jacobson, Wright tried to persuade another politician – Sen. Mike Duffy – to settle disputed expenses. Wright dipped into his own pocket to convince Duffy to pay $90,000. After CTV eventually revealed that payment Wright resigned from the PMO.

Last week, the Prime Minister’s Office again asked Adler to make another payment, after Postmedia reported that Adler had solicited donations from lobbyists with whom he had meetings connected to his work on the finance committee, an apparent violation of MPs’ ethics rules.

The prime minister’s spokesman said Friday that Adler would be directed to repay some of the donations.

Adler raised about $30,000 at the $400-a-ticket cocktail fundraiser at Toronto’s elite Albany Club on Feb. 20, 2013, not long after he settled with Jacobson.

Jacobson is on bail in San Diego while he attempts to have his guilty plea set aside. At the end of 2013, he filed a motion claiming that he had been betrayed by his previous defence lawyers.

To prove his claims, he has had to waive solicitor-client privilege on some communications with his lawyers. In a complicated process, his current and former lawyers and U.S. prosecutors have been wrangling over which emails and voice recordings can be considered by the court.

Jacobson’s lawyers are next due in a San Diego courtroom on July 9-10.

“Mr. Jacobson very much looks forward to having his day in court and a fair hearing on the merits of his motion,” said Michael Attanasio, his American attorney.

Jacobson, 59, a colourful, larger-than life character, grew up in Winnipeg. He became wealthy from business ventures in Iraq, Russia and Israel.

In 1999, he filed a lawsuit against the Canadian Security Intelligence Service, accusing the agency of falsely linking him to Russian mobsters.